Winners and Losers of Budget 2018

Budget 2018 is an election year budget which was expected by many. Finance Minister Arun Jaitley rolled out a budget that was designed to help distressed farmers, rural areas, employment and private investment. It can be rightly said that in the budget, farmers and villagers, as well as agriculture oriented companies emerge as winners.

WINNERS

Farmers- Budget 2018 has promised to raise the minimum price offered to the farmers for crops. It delivers more money for the rural areas and invests heavily in agriculture markets across the country. This includes irrigation projects and aquaculture projects that will benefit agriculture focused companies in the country.

FMCG Companies- The budget has a boosted spending on the fast moving consumer goods companies which could benefit the day laborers and increase disposable income. Companies like Hindustan Unilever Ltd, Larsen & Toubro Ltd and Mahindra & Mahindra Ltd. could significantly benefit.

Health Care Providers- National Health Pension Scheme, the government’s new flagship initiative to improve health condition in the country aims to insure 500 million people for 500,000 rupees a year of care. This could greatly benefit companies like Fortis Healthcare Ltd and Apollo Hospitals Enterprise Ltd.

Airports- The government pledged to expand the regional airport construction. Firms like GMR Infrastructure Ltd and GVK Power & Infrastructure Ltd. could benefit.

Transport Companies – Finance Minister Arun Jaitley promised an improvement in the infrastructure of the country by spending on roads and railways. This could benefit construction firms like Larsen & Toubro Ltd., NCC Ltd., Cimmco Ltd. and IRB Infrastructure Developers Ltd.

LOSERS

Samsung and Apple – With an aim to boost domestic manufacturing, the budget lifts custom duty on mobile phones to 20 percent from the current rate of 15 percent. This could lower returns for companies like Apple and Samsung as they seek profits in the largest phone market.

Financial Sector- With a decision to impose long term capital gains tax on equity investments, the investor sentiment could be dented. This could impact companies like Aditya Birla Capital Ltd., HDFC Standard Life Insurance Co Ltd., ICICI Prudential Life Insurance Co Ltd., IDFC Ltd., Reliance Capital Ltd and General Insurance Corp of India.

Defence sector- Although Jaitley promised an industry friendly policy to promote defence production but there was no indication of a boost to the spending.

Consumers- Lastly, the government has increased the existing health and education levy to 4 percent from 3 percent which applies to all products and services. This will make almost everything more expensive for the consumers.